THRIFTS: Give Me Back My S&L

Give Me Back My S&L

In pushing to clean up the savings and loan mess, have federal regulators acted too hastily in declaring some thrifts insolvent? A federal judge in Topeka thinks so in at least one case. Last week he ordered the Office of Thrift Supervision to return control of an S&L to its original owners on the ground that the agency used "arbitrary and capricious" accounting methods to justify seizing the thrift, Franklin Savings (assets: $9.3 billion) of Ottawa, Kans.

The OTS claimed Franklin had "insufficient capital and operated in an unsound and unsafe manner." But the owners of the S&L argued that the...